This paper studies the cost of limited commitment when a central bank commits to a price‐level target path but retains the discretion to re‐optimize it whenever the cost [...]

We develop a model in which a financial intermediary's investment in risky assets—risk taking—is excessive due to limited liability and deposit insurance, and characteriz[...]

This study considers the problem of optimal allocation of a common resource in systems with parallel structures. We propose a method of solving such problems in models co[...]

We propose an effective extension method for finding exact stable solutions for problems of optimal allocation of resource or data flows, in which the constraint matrix c[...]

We analyze the impact of interest rate policy on financial stability in an environment where banks can experience runs on their short‐term liabilities forcing them to sel[...]

In the context of the classical stochastic growth model, we provide a simple proof that the optimal capital sequence is strictly bounded away from zero whenever the initi[...]

This paper examines the role of monetary policy in an environment with aggregate risk and incomplete markets. In a two-period overlapping-generations model with aggregate[...]

This paper examines the role of monetary policy in an environment with aggregate risk and incomplete markets. In a two-period overlapping-generations model with aggregate[...]

In this paper, we use an economics decision-making experiment to test a key assumption underpinning the efficacy of price-level targeting relative to inflation targeting [...]

Various papers have suggested that Price-Level targeting is a welfare improving policy relative to Inflation targeting. From a practical standpoint, this raises an import[...]